- NAB Business Confidence: Tuesday, 0:30. Business confidence in the economy remains weak, as the slowdown in the Chinese economy has hurt the Australia economy. The indicator slipped to zero in November, down from 2 pts a month earlier. Will we see a rebound into positive territory in December?
- MI Leading Index: Tuesday, 23:30. The Melbourne Institute indicator has been steady, with three straight readings at -0.1%. It is based on 9 economic indicators. We now await the December release.
- Inflation Reports: Wednesday, 0:30. Consumer inflation is released each quarter, magnifying the impact of each release. The headline release came in at 0.5% in Q3 and is expected to tick up to 0.6% in the fourth quarter. Trimmed Mean CPI, which excludes the most volatile items included in CPI, is projected to stay unchanged at 0.4%.
- Private Sector Credit: Friday, 0:30. Business and consumer borrowing levels remain weak, which reflects weakness in consumer spending. After back-to-back gains of 0.1%, the forecast for December stands at 0.2%.
- Chinese Manufacturing PMI: Friday, 1:00. The manufacturing sector has stalled, with two consecutive readings of 50.2 points. These readings are barely above the 50-level, which separates expansion from contraction. Little change is expected in January, with an estimate of 50.1 pts.
AUD/USD Technical Analysis
Technical lines from top to bottom:
We start with resistance at 0.7250.
0.7165 has held firm since early April.
0.7085 has been a resistance line since July. This is followed by 0.7022.
0.6960 has acted in resistance since the first week in January, when AUD/USD went on a sharp slide.
0.6865 (mentioned last week) switched to a resistance role after considerable losses by AUD/USD last week. It is a weak line.
0.6744 is providing support.
0.6627 has held in support since March 2009.
0.6456 is the final support line for now.
I remain bearish on AUD/USD
The Aussie continues to lose ground in January. The coronavirus in China has spread outside of the country, and investors are snapping up safe-haven assets, while staying away from riskier assets such as the Australian dollar.
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